The autosport.com website reported Arrivabene's ousting had been confirmed by senior sources within the team and said Elkann had decided Binotto was the right man to lead the team forward.
"The decision was taken together with the company's top Scuderia Ferrari's Team Principal". Further, some strategy mistakes over the season were also made.
Born in Switzerland, a graduate of Lausanne's Polytechnic university, Binotto first joined Ferrari in 1995 as an engine engineer, working his way up to the race team in 1997.
The Ferrari veteran, who has risen through the ranks to technical director and overseen a big step up in engine performance, has also reportedly been a target for rival constructors.
In four seasons under Arrivabene, Ferrari won 14 races 13 by Vettel and one by Raikkonen and finished second three times in the constuctors' standings.
Former chief engineer Luca Baldisserri spoke in 2016 of a "climate of fear" at Maranello with staff allegedly reluctant to take risks in case they were fired by bosses with little racing experience.More news: De Blasio Announces Healthcare For All NYC Residents, Regardless Of Immigration Status
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A combination of these has meant that Ferrari has won neither the world drivers' nor world constructors' championship since its 2008 triumph when the F2008 won the constructors' title.
While Arrivabene has been easy to criticise, he has done a better job than many thought he would, and has struggled with Ferrari's internal politics, following numerous diktats passed down to him by the late chairman Sergio Marchionne, who adopted a unusual strategy towards the outside world, seeking to ignore the media, rather than trying to work with them.
Binotto, depicted as a tough character with a demanding work ethic, was very much a favourite of former Ferrari boss Sergio Marchionne who had earmarked the Swiss engineer for a leading role at the Scuderia before his untimely passing last summer.
Binotto, who had been working as Ferrari's chief technical officer, has been with the team for almost 25 years.
Niki Lauda is back in intensive care.The Formula 1 legend and Mercedes team chairman had been vacationing in Ibiza following his long recovery from a life-saving lung transplant operation. But. That talk then intensified towards the end of last season, particularly as tensions grew between him and Technical Director Mattia Binotto.